Your Trading Week Ahead – May 16th

Welcome to Your Trading Week Ahead for May 16th. Here’s what you need to know before you go…

Quick recap

Equity markets closed the week on a positive note after a spike in volatility earlier in the week. The S&P 500 ended Friday at 4,173. That was up from the 4,057 low set on Wednesday, but still down 1.39% from the previous week.

The Dow followed a similar trend, ending the week slightly lower at 34,382. Meanwhile, tech stocks led the pullback as the Nasdaq closed at 13,429 — down 2.35% on the week.

Volatility ramped up Wednesday due to concerns of gasoline shortages and supply chain issues stemming from the Colonial Pipeline cyber-attack. The pipeline was forced to shut down operations for much of the week, sparking mayhem and panic buying of gas across the country.

Those fears eventually subsided as the company announced operations would resume by the weekend. On Saturday, Colonial confirmed all of their systems were back to operating normally after paying a $5 million ransom to the hackers responsible for the attack.

What to watch this week

Earnings season winds down

There are a few high-profile earnings yet to be reported. Walmart ($WMT), Macy’s ($M), Home Depot ($HD), and Lowe’s ($LOW) highlight the week ahead.

Quarterly numbers from these retail giants are expected to give us an idea of how consumers are spending their money these days. That should give the market further indication of how the overall economy is recovering.

The crypto world responds to Elon

Elon Musk dropped an unexpected tweet on Wednesday that sent Bitcoin ($BTC) sharply lower. The business magnate explained that Tesla ($TSLA) would no longer accept Bitcoin for vehicle purchases over concerns of the cryptocurrency’s environmental impact.

Following the announcement Wednesday evening, Bitcoin quickly fell from the $54,000 level to a low of $47,341 by mid-Thursday. It ultimately finished the week at $49,818.

Other high-profile individuals immediately came out in support of $BTC. Mark Cuban issued a response to Elon’s comments with the following tweet:

Keep an eye on Bitcoin this week. As of Sunday afternoon, the cryptocurrency has continued falling to the downside — trading as low as $45,294.

Economic calendar

There are several economic events on the calendar this week with the potential to move markets. Here’s a few of the most important things to watch:

• FOMC meeting minutes – Wednesday, May 19th at 2pm ET
• Jobless claims – Thursday, May 20th at 8:30am ET
• Existing home sales – Friday, May 21st at 10am ET
• Oil and gas inventories – petroleum on Wednesday at 10:30am ET; gas on Thursday at 10:30am ET

The bottom line

Stay tuned for any additional news that could stir volatility. And beware of incoming Elon Musk tweets.

Remember, trading the current choppy market conditions can be challenging. The key to surviving the chop is to remain disciplined.

Interested in learning how you can use the power of unusual options activity to conquer the market? Click here to download our Insider’s Guide to Trading UOA.